EDP PAO collapses

The Chinese takeover bid for Portugal’s electricity giant EDP failed on Wednesday.

The decision by EDP shareholders and directors to maintain a 25% cap on voting rights meat that Chinese state-owned energy provider China Three Gorges’ bid to takeover the company effectively collapsed.
Shareholders at the general meeting, representing 65.18% of the group’s share capital, turned down the proposal from the Elliott Management Corporation, owned by Paul Elliot Singer, to alter the statutes which currently limit voting rights.
The proposal fell by 56.60%.
The PAO had been launched by China Three Gorges on 11 May 2018 and included a condition to scrap limits on voting rights.
China Three Gorges owns 23.27% of EDP while CNIC – also Chinese – owns a further 4.98% of the Portuguese company.
Reacting to the failed PAO in China on Thursday, Portuguese President Marcelo Rebelo de Sousa said it proved “the market is working” and played down any negative impact on the economic and financial relations between the two countries.
“There was no state intervention from either of the states or from regulators. The market works according to the terms in which it has to work,” the President said.
The Portuguese government stated last year when the PAO was launched by the Chinese that it would not oppose the €9Bn takeover.
The rejection of the bid comes amid growing unease within the European Union over an increase of Chinese State investment in Western Europe.